Real estate crowdfunding recommendations??

Question

Looking for recommendations on best crowdfunding investment platforms.

Don Konipol · Answer

@Zak House

There see, to be three types of real estate operators trying to use Reg CF rather than Reg D

1.  First time operators hoping to take advantage of the emerging “all in one” platforms available so as to limit their investment in legal and organization expenses

2.  Experience syndicators testing the water to see if Reg CF develops into a viable capital raising mechanism

3.  “In house” operators associated or under common ownership with the CF platform itself.

Now that the maximum yearly raise has been increased from $1 million to $5 million, there may be some viability in Reg CF for real estate.  Though right now Reg D 506 c is a much better fit for my company.

Account Closed · Answer

We're using a locally based platform here in Denver called Buy the Block. We opted for a crowdnote as our investment vehicle. Also, They weren't as picky as some of the big names, like Fundrise, RealCrowd, etc.

Ian Ippolito · Answer

Every investor has a different risk tolerance, comes from a different financial situation and different financial goals. So in my opinion there is no one "best" crowdfunding investment and also no one "best" crowdfunding platform. The answer to that is going to be very specific to the individual investor.Having said that I will say that currently the largest volume of deals (by far) are on Crowd Street. And so regardless of the type of investor you are, that's probably a good place to start.

Bryan Hancock · Answer

The word "platform" implies marketplace in my opinion.  The marketplace model is a tough two-sided problem to solve for any endeavor.  Heaps of venture capital have been raised to try to make it profitable and the broker-dealers have shunned the smaller projects for a long time because the real costs of soliciting and serving investors is quite high.  When these costs exceed the investor's willingness to pay them it doesn't bode well for the overall business model.  Capital formation for real estate is quite different than what the SEC contemplated when they did the Angelist and Funder's Club NALs that most platforms use as the basis for their securities apparatus.  The lawyers and other shovel-sellers have done well, but it really hasn't helped the sponsors as much as it could have.

There are other white label companies as well, but they generally don't come with a marketing component so that also doesn't really help sponsors much.

In general the industry has matured a lot in the last 5 years and with Reg. D's limits being raised I see this change accelerating over the next many years.  $5M for CRE will move the needle quite a bit in many locales.

The best sponsors are using their own branding and operating their own sites to engage with investors.  Renting a list of investors doesn't help them engage with investors on the terms they want and own their capital formation process.  The more senior sponsors that I know still largely aren't doing much online, but this will change as time passes.  Some of the folks I know and respect locally are starting to modernize a bit, but the industry is still evolving.

Real estate crowdfunding recommendations??

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